Perhaps, according to a Wall Street Journal story this morning that has a lot of people scratching their heads. Seems that HBO, Showtime, and Sony want their new, or planned, video streaming offerings to be classified as “managed” services, which would entitle them to special treatment — potentially at odds with the FCC’s new net neutrality rules.
It’s still mostly a theoretical issue. Comcast, the largest broadband provider, seems cool to the idea, especially while the FCC and Justice Department weigh its $45 billion plan to buy Time Warner Cable. Net neutrality supporters were outraged in 2012 when it offered its Xfinity-on-Demand service through XBox game consoles as a managed service, instead of a conventional Internet one. Netflix CEO Reed Hastings noted at the time that viewers using his platform could run up against their broadband usage caps, while Comcast’s customers on the XBox would not.
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The discussion is relevant again after the FCC adopted tough new net neutrality rules, helping to clear the way for scores of companies to launch Internet video services. Here’s the challenge: Cable operators funnel all of the content that we associate with the Web on the same coaxial wire that provides their non-Internet TV channels, phone, home security, and business services. But the various forms of content play under different rules. Operators can make sure that the HBO TV channel looks great, but can’t do the same for the HBO Now online service.
That would change, though, if HBO Now became a managed service — or, in FCC parlance, a Non-Broadband Internet Access Service (Non-BIAS).
Regulators’ open Internet order anticipates the possibility that companies might seek a non-BIAS designation to get a leg up on rivals. The FCC says it will “closely scrutinize” the non-BIAS services “and their impact on competition” — particularly ones that are similar to “applications and services offered over broadband Internet access service.”
As is often the case on media tech matters, BTIG’s Richard Greenfield was ahead of the pack in identifying the potential for confusion as big companies look to give their streaming services an edge. For example, he believes that Apple would only want to stream pay TV channels if it can “ensure quality of service by NOT going over the public Internet.” As other companies launch Web video services, bandwidth will start to become clogged, and “non-BIAS classified video services will outperform the ones that use the public Internet,” he says. “Reading the FCC’s Open Internet Order it is far from clear how the FCC will treat these services.”
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